Linkage between psychological contract and employee retention, performance and productivity in organizations in Nigeria

Abstract

The study examines the linkage between psychological contract and employees‘ retention, performance and productivity in organizations in Nigeria. It studies the interplay between psychological contract and the variables with a view to understanding their interactions and impacts in organizations. The methodology is theoretical and analytical with the use of secondary resource materials. The paper reveals that global competition has altered business environment, hence organizations are compelled to devise improved methods of survival and performance by creating healthy and progressive relationship with their employees. The paper further averred that employees‘ behaviours are susceptible to the healthy relationship with their management. Consequently, a breach of psychological contract hinders employees‘ performance and ignites employees‘ propensity to quit the organization. This, to a considerable extent, affects organizational output. The study therefore, proposes that employee/employer relationship can be strengthened by clearly stating expectations during recruitment and induction stages of employment, initiating organizational culture that promotes transparency on policies and procedures that effect employees and creating a humane work environment that accommodates cooperation, consensus and employees‘ participation. This is necessary if organizations need to maintain their vibrant and resourceful workforce that will competitively drive organizational goals in this globalized economy and society.

Keywords: Psychological contract, Employer, Employee retention, Performance, Productivity, Organization, Nigeria.